Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
November 30, 2013
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
Highlights / Catch Notes
Income Tax
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Disallowance u/s 40(a)(ia) for non deduction of TDS - The receiver of lease rent has filed the returns of income belatedly subsequent to the impugned proceedings - assessee cannot be said to have satisfied the conditions prescribed in the proviso to sec. 201 of the Act inserted by the Finance Act, 2012 - AT
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Just because an assessment u/s 153(3) has not been made or no scrutiny has been made, the income of the minor could not be disbelieved, when the interest was clubbed in the hands of father - HC
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Yield of paddy - estimation of income - It is clear that the yield shown by the assessee is definitely on the lower side - addition confirmed - HC
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Subvention payment - amount received from parent company - If the financial assistance is extended to run business more profitably or to meet recurring expenses, such payment will have to be treated as revenue receipt - HC
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Depreciation on goodwill – assessee purchased the business lock stock and barrel and has shown the value of the goodwill right from the acquisition onwards - depreciation allowed being intangible assets - AT
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Coercive recovery proceedings where stay application is pending - AO has misused its power - Revenue should refund the entire amount to the assessee within 10 days from the dated of receipt of this order - AT
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Notional Rental income of house property - assessee was not carrying out any business, but he was in occupation of the property - the same is taxable u/s 22 - for valuation, matter remitted back - AT
Customs
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Refund claim u/s 27 - Import of Watchguard Security Products - embedded software - the claim that the software and hardware were separate and distinct cannot be acceptable - AT
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Cars were imported in contravention of the condition that the car should have been imported from the country of manufacture and the cars were rightly confiscated under section 111 (d) of the Customs Act - AT
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Refund of SAD in terms of Notification No. 102/2007 - when the credit of duty paid car is not allowable, substantive benefit of exemption Notification should not be denied on the ground of procedural or technical infraction - AT
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Violation of Notification No. 102/2007 - Refund of SAD - Whether subsequent Notification No. 29/2010-Cus., dated 27-2-2010 should be read as clarificatory and retrospective - Held no - AT
Corporate Law
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Maintainability of Petition u/s 138 of Negotiable Instruments Act at Mumbai - Power of Magistrate to recall process of summons u/s 201 of Criminal Procedure Code - appeal allowed - SC
Service Tax
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The plea that the Chartered Accountant retained by the Municipal Corporation did not pursue the appeal, did not absolve officers of the Municipal Corporation from seeking information relating to the appeal - HC
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Suomotu refund of excess payment - waiver of Penalty under section 76 - the demand of tax along with interest is upheld and penalty imposed is set aside - AT
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CENVAT Credit of service tax paid of GTA service - In the case of services which are intangible, place of removal cannot be determined easily and the expression ‘place of removal’ defined in Central Excise Act cannot apply. - AT
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Provision of corporate guarantee clearly falls outside banking or financial services. however it would be falling under “Business Support Services“ (BBS) - stay denied - AT
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Refund of service tax in case of Export of goods - Notification No.41/2007 - Bar of limitation to be computed from the date of payment of ST where ST has been paid under reverse charge method - AT
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Commercial Training and Coaching Services - Exemption under Notification No.24/04-ST dated 10.09.2004 - Vocational training institute - aircraft maintenance engineer approved by D.G.C.A - prima facie case is in favor of assessee - AT
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Whether appellant is entitled to the Service Tax credit of Service Tax paid by the appellant on the personal insurance of its employees - credit allowed for the period prior to 1.4.2011 - AT
Central Excise
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A countrywide web of dummy companies has been woven for defrauding the Revenue and this case is only a tip of the iceberg of a much bigger cenvat credit fraud - AT
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Non-payment of differential duty, which would have been refunded to the assessee on account of export of the goods under rebate, results in revenue neutrality and thus, penalty cannot be imposed - AT
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Denial of Cenvat credit - Merely because the assessee has entered receipt of wire and rods in the register of ingots, as per the practice being followed by them, denial of Cenvat credit on this technical and procedural lapse is not called for - AT
VAT
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Exemption of tax u/s 4-A of the UPTT - whether the unit is self-financed or it is financed by any financial institution - application for loan was applied before seeking exemption but not loan was granted - exemption can not be rejected - HC
Case Laws:
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Income Tax
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2013 (11) TMI 1512
Disallowance u/s 40(a)(ia) for non deduction of TDS - Lease rent – applicability of provisions of section 201(1) as inserted by Finance Act, 2012 where recipient has shown the income in its return and paid the appropriate tax on such income - Held that:- The assessee was unable to pay the lease rent and therefore has passed only accounting entry for the treatment of leaserent and not deducted tax source thereon - The receiver of lease rent has filed the returns of income belatedly subsequent to the impugned proceedings - The assessee cannot be said to have satisfied the conditions prescribed in the proviso to sec. 201 of the Act inserted by the Finance Act, 2012 – The assessee did not demonstrate as to how the provision of section 40(a)(ia) is not applicable on it – Decided against assessee.
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2013 (11) TMI 1511
Validity of reassessment u/s 147 - Without recording the reasons for reopening - Held that:- The AO has not showed that escapement of income is on account of failure on the part of the assessee to fully and truly disclose all material facts necessary for assessment - The assessment year involved is A.Y. 2004-05 and impugned notice u/s. 148 was issue on 23.3.2011 i.e. after expiry of about 4 years from the end of the said assessment year - Following Sound Casting Pvt. Ltd. Vs. DCIT [2012 (4) TMI 248 - BOMBAY HIGH COURT] - The AO has failed to establish that there was failure on the part of the assessee to disclose fully and truly all the material facts necessary for assessment - Decided against Revenue.
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2013 (11) TMI 1510
Penalty u/s 271(1)(c) - addition on account of Deemed dividend u/s 2(22)(e) - whether amounts to concealment of income - Held that:- The assessee has taken the amount for meeting normal business transaction and travelling and other expenses - The assessee's explanation that the addition was on account of deeming provision of which he was not aware is sufficiently cogent - The assessee's contention that no material was suppressed - There was no malafide intention on the part of the assessee to evade the tax - It was an inadvertent error which was genuine and bonafide - Following Dilip Sheroff case [2007 (5) TMI 198 - SUPREME Court] - Mensrea was a essential requirement of penalty u/s 271(1)(c) - Following Hindustan Steel vs. State of Orissa [1969 (8) TMI 31 - SUPREME Court] - Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act, or where the breach flows from a bonafide belief that the offender is not liable to act in the manner prescribed by the statute - Decided against Revenue.
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2013 (11) TMI 1496
Share application money - Addition u/s 68 - Held that:- Following CIT VS NR PORTFOLIO PVT. LTD [2013 (11) TMI 1381 - DELHI HIGH COURT] - Mere production of PAN Number or assessment particulars does not establish the identity of a person. The identification of a person includes the place of work, the staff and the fact that it was actually carrying on business and further recognition of the said company/individual in the eyes of public. Burden to prove - The onus to prove is on the Assessee - Mere production of incorporation details, PAN Numbers or income tax returns may not be sufficient when surrounding and attending facts predicate a cover up - The production of incorporation details, PAN numbers or income tax details may indicate towards completion of paper work or documentation but genuineness, creditworthiness and identity of investment and the investors are deeper and obtrusive than mere completion of paper work or documentation - The assessee has not been able to establish the identity, creditworthiness of the share applicants and the genuineness of the transaction - The surrounding circumstances and inquiries made by the Assessing Officer were significant but the said finding have been ignored by the Tribunal - It has failed to take holistic view - Decided in favour of Revenue.
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2013 (11) TMI 1495
Income of minor - Held that:- The interest income has been disclosed by the assessee (father of minor) through out these years - The donors have also accepted the fact of gift of Rs. 1 lakh on 19 different occasions, who happened to be close relatives - For 1993-94, 1994-95 assessment years the interest income earned by the minor was clubbed in the hands of the father - Just because an assessment under Section 153 (3) has not been made or no scrutiny has been made, the income of the minor could not be disbelieved, when the interest was clubbed in the hands of father - Decided against Revenue.
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2013 (11) TMI 1494
Validity of reassessment - Held that:- The assessee has claimed deduction u/s 80IB for its Sivasa Unit - As the assessment sought to be reopened is beyond the expiry of four years from the end of the relevant assessment year i.e. 200607, two conditions precedent have to be satisfied - The material which forms the basis of reason to believe is the allocation of expenditure between the two units leading to higher deduction under Section 80IB of the Act in respect of the petitioner’s Silvasa Unit - The Assessing Officer at that point of time appears to have been satisfied that the allocation of expenditure made by the petitioner between the two units and did not reduce the claim by increasing the expenditure attributable - While examining the quantum of deduction to be allowed under Section 80IB of the Act the issue of allocation of expenditure for that purposes would necessarily have been examined - There is no tangible material to lead to a reason to believe that income has escaped assessment but only change of opinion on the part of the Assessing Officer on the material available, thus cannot be a subject matter of reassessment. The petitioner had in its profit and loss accounts allocated various common expenses between the non 80IB unit and 80IB unit. This was also subject to examination in determining the deduction available under Section 80IB of the Act to the Silvasa Unit - There has been disclosure of material facts truly and fully for the purposes of assessment on the part of the petitioner - The notice issued u/s 148 is quashed - Decided in favour of assessee.
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2013 (11) TMI 1493
Block assessment u/s 158BC - Genuineness of purchase transactions - claim of deduction u/s 80HHC - Held that:- The Revenue does not doubt or dispute receipt of payment through banking channels - In most money laundering cases this would not be in issue as receipt through banking channels becomes the starting point of investigation - Adjudicating authorities and courts cannot take a myopic view but a holistic approach is required - The surrounding circumstances and milieu have to be gone into and examined and indeed would reflect and help in ascertainment of truth - In the present case, the order of the tribunal is lacking on the said aspects. Even if there may be justification and reason to ignore or not entirely base the case on statements of Chander Prakash Sachdeva - Several facts required explanation and elucidation from the respondent - Absence or failure to explain may in fact be reflective and help in adjudicating the contention whether any threats were extended to Chander Prakash Sachdeva or whether the facts corroborate the statement and together establish the stand of the Revenue – The CIT(A) has not found that the purchases from Sachdeva Trading Co. and Rave Scans were genuine - Purchases were made in cash from third parties which were rejected and returned by the Hong Kong party - The assessment order does not refer to re-import and rejection of material by the Hong Kong party after export – Tribunal has not decided the ground of appeal that the respondent had not filed certificate as postulated under Section 80HHC(4) - - while deciding the question law in favor of revenue, matter remanded back to ITAT for fresh decision.
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2013 (11) TMI 1492
Reserve fund for educational purposes - Violation of Section 11(3)(d) – Held that:- The funds were created during the assessment year 1996-97; 1997-98; and 1998-99 i.e. prior to 01.04.2003 though it was utilized during the assessment year under consideration – As per the amended provisions - The Assessing Officer shall not allow application of accumulation of income by way of payment or credit made for the purposes referred to in clause (d) of sub-section (3) of Section 11 - This takes away the discretion of the Assessing Officer provided in sub-section (3A) to allow the trusts to apply the accumulated income for payment or credit to other charitable or religious trusts and institutions - The Finance Act, 2003, has amended the proviso to sub-section (3A) of Section 11 so as to empower the Assessing Officer to allow donation to another trust or institution as application of accumulated income for charitable purposes in the year in which the trust or institution claiming exemption is dissolved – Following assessee's own case for the assessment years 1994-95 - The assessee is registered under Section 12AA as well as 80G(5) and also under Section 10(23C)(iv) - The entire income of the assessee remains non-taxable – The issue is restored for fresh adjudication.
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2013 (11) TMI 1491
Rectification application - Held that:- The learned Tribunal taking note of the judgment in case of Indwell Constructions Versus Commissioner Of Income-Tax [1998 (3) TMI 121 - ANDHRA PRADESH High Court] passed the order on 25.08.2010 deciding the matter in favour of the assessee - According to the Department, the issue decided by this court in the aforesaid case was not applied at all - The learned Tribunal has committed grave error in not taking the note of the judgment of this court and in not considering whether the ratio of the decision therein is applicable in this case or not - The issue was restored for fresh adjudication.
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2013 (11) TMI 1490
Expenses on exempt income - Held that:- The assessee has himself disallowed an amount of Rs.1,73,98,255/- under Section 14A of the Act - The said figure was calculated by appropriating expenditure incurred in proportion of the exempt income to the total income - 95% of the total expenditure was suo motu treated and attributed as expenditure relatable to earning of exempt income - If Rule 8D is applied to calculate the disallowance then the amount will be lower than the disallowance computed by the assessee - Decided against Revenue.
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2013 (11) TMI 1489
Yield of paddy - estimation of income - Held that:- The AO pointed out two comparable cases who had shown yield of rice at more than 66% in the same area as that of assessee - In case of nine mills from Sunam cited by the assessee, the yield is 65% or more - In the case of assessee the yield of rice has been shown only at 64.75%. Having regard to the aforesaid cases as relied upon by the Ld. Counsel as also the cases relied upon by the AO, which are also from the area of the assessee i.e. Sunam - It is clear that the yield shown by the assessee is definitely on the lower side and that the Ld. Counsel has not placed any material before us which would justify the yield shown by the assessee - Decided against assessee.
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2013 (11) TMI 1488
Subvention payment - Revenue receipt or capital receipt - Held that:- Huge amounts were paid by the parent company not only to make good the loss, but also to see that the assessee would run more profitably - The monies paid were not utilized either for repayment of the loan undertaken by the assessee for setting up their unit or for expansion of existing unit/business - The main eligibility condition with which we are concerned is that the amount ought to have been utilized by the assessee to meet recurring expenses and/or to run their business more profitably and so also to get out of the loss that they were suffering at the relevant time - It is the object which is relevant for the financial assistance which determines the nature of such assistance The character of the receipts in the hands of the assessee has to be determined with respect to the purpose for which payment was made. If the financial assistance is extended for repayment of the loan undertaken by the assessee for setting up new unit or for expansion of existing business then the receipt of such aid could be termed as capital in nature - If the financial assistance is extended to run business more profitably or to meet recurring expenses, such payment will have to be treated as revenue receipt - In the present case, the financial assistance was extended neither for setting up any unit or expansion of existing business or for acquiring any assets - Decided in favour of Revenue.
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2013 (11) TMI 1487
Depreciation on goodwill – Held that:- The assessee as per slump sale agreement, acquired a going concern, business of on-line and other electronic media through internet and other networks including databases, online newspapers and magazines – An amount which is reflected in the balance sheet as goodwill was for acquisition of bundle of business or commercial rights which was defined in the slump sale agreement, termed as ‘goodwill’ in the books of accounts – Following R.G. Keshwani vs. ACIT [2008 (2) TMI 443 - ITAT BOMBAY-H] - The principle of ejusdem generis is applicable in such case - Where there are general words following particular and specific words, the meaning of the latter words shall be confined to things of the same kind as specified – In the given case for interpreting the expression 'business or commercial rights of similar nature' specified in section 32(1)(ii) - Such rights need not answer the description of 'know-how, patents, trademarks, licenses or franchises' but must be of similar nature as the specified assets - On a perusal of the meaning of the categories of specific intangible assets referred in section 32(1)(ii) preceding the term 'business or commercial rights of similar nature, it is seen that the aforesaid intangible assets are not of the same kind and are clearly distinct from one another. In the absence of the aforesaid intangible assets (business or commercial rights), the assessee would have had to commence business from scratch and go through the gestation period whereas by acquiring these business rights along with the tangible assets, the assessee got an up and running business – Following Hon’ble Supreme Court in the case of C.I.T., Kolkata vs. Smifs Securities Ltd [2012 (8) TMI 713 - SUPREME COURT] - Goodwill is an asset under Explanation 3(b) to Section 32(1) qualifies for depreciation u/s. 32 - Explanation 3 states that the expression ‘asset’ shall mean an intangible asset, being know how, patents, copyrights, trademarks, licenses, franchises or any other business or commercial rights of similar nature – Decided in favour of assessee.
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2013 (11) TMI 1486
Undisclosed income – Held that:- The assessee has failed to prove by any documentary evidence that the income of assessee was below taxable limit - The assessee during the course of assessment proceedings was non-cooperative and non-complied with the notices issued by AO - The AO is justified to estimate, considering the quantum of income declared by assessee in the preceding as well as in the succeeding assessment years in taking average of the same – Decided against assessee. Foreign travelling expenses – Held that:- The assessee has not furnished any evidence to support her explanation that during her visits to Dubai she stayed with her husband and her husband born the expenses of boarding, lodging, local traveling etc on her behalf – The onus is on the department to prove that the said expenses were not incurred by husband of the assessee but were born by the assessee from undisclosed income –No incriminating evidence was found during the course of search regarding undisclosed income attributable to foreign travelling of the assessee - The ld. CIT(A) is justified in deleting the addition of Rs.2,75,000/- which has been estimated on account of boarding, lodging, local travelling and entertainment etc – The ld. CIT(A) was not justified to estimate a sum of Rs.25,000/- per trip aggregating to Rs.75,000/- as undisclosed income of the assessee on account of foreign traveling particularly when no evidence is placed on record and the said estimation is made arbitrarily and not on any cogent material on record – Partly allowed in favour of assessee. Calculation mistake – Held that:- The bills were prepared for less quantity and the actual delivery was higher and the total difference was only 300 ltrs – The AO applied rate of Rs. 12.10/- per litre sales for the said excess comes to Rs.3,630/- but the addition as such made by AO is Rs.36,000 - Assessee has asked for relief by taking the correct figures and without disputing the rate and the quantity as considered by the authorities – Decided in favour of assessee. Gold and diamond jewellery found in search – Mismatch with wealth tax return – Held that:- Total weight and value of the jewellery found during the course of search and disclosed in the Wealth Tax returns and under the VDIS declarations are same - It could be possible that items of VDIS and exact specifications were not reported due to inadvertence particularly when the assessee had disclosed jewellery in her VDIS declaration - The difference in specifications were due to making and remaking of those jewellery items - The value of specifications were small it should be accepted that there was no non disclosure of income on this account – Decided against Revenue. Fall in GP rate – Held that:- The firm Sunil Chemical Industries dealt with petrochemical products having higher margin and whereas the new firm in which the assessee was a partner only for four months were dealing in Petroproducts - AO compared unlike products and compared GP of the assessee firms of 0.81% as against GP of the earlier firm which was 2.9% - The assessing officer has not pointed out any discrepancy in the accounts of the proprietary concern - The expenses claimed were genuine or were bogus or inflated or were incurred for any purpose other than business purpose - The book result declared by the proprietary concern cannot be disbelieved. Interest on overdraft expense - The overdraft fully or partly was not utilized by the appellant for any purpose other than her business purposes - The basis adopted by the assessing officer to work out the admissible interest expense was not correct - Outstanding liability on the last day of the accounting period is no parameter to work out the admissible interest expense - The actual working on the basis of the utilized overdraft facility on day to day basis and over the time should be considered - The assessing officer should have seen the total gross profit generated by the appellant. Discount received by the appellant is linked with the transactions of purchase and sale – Decided against revenue.
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2013 (11) TMI 1485
Stay against Demand - coercive recovery proceedings where stay application is pending - Held that:- The assessee has filed the appeal before the Tribunal - The A.O has recovered the entire outstanding tax from bank account of the assessee by taking a coercive action u/s 226(3) of the Income Tax Act without waiting for the outcome of the Stay Application filed by the assessee before this Tribunal - Following UTI Mutual Fund Vs ITO [2012 (3) TMI 333 - BOMBAY HIGH COURT] - The A.O has taken a coercive action by ignoring the basic rule of law and the directions and guidelines issued by the Hon'ble Bombay High Court - The Income Tax Officer being a quasi judicial authority should observed the parameters which are laid down in this context - The action of recovery from the bank account of the assessee is a gross violation of the directions as well as the basic rule of law and principle of natural justice - The Revenue should refund the entire amount to the assessee within 10 days from the dated of receipt of this order - The assessee has already filed a writ petition in the High Court and the matter of stay of demand is subjudice before the Hon'ble High Court therefore the judicial propriety and discipline demand that this Tribunal should not venture into the subject matter which is subjudice before the Hon'ble High Court - Partly allowed in favour of assessee.
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2013 (11) TMI 1484
Under reporting of gross receipts – Held that:- Assessee is doing advertisement business in his individual capacity as well as in HUF capacity - Assessee has given the PAN, obtained in an individual capacity to work done in HUF capacity - This has been said to be the reason for the difference in receipt as shown by the assessee and that as reflected in the Form No. 26AS – The ld. CIT(A) has noted that in the appeal proceedings, assessee has duly established that the difference was properly explained - Ld. CIT(A) has also accepted that return of HUF purportedly filed by the assessee in HUF capacity when the appellant submitted that as it was not filed by him as it does not have his signatures - Ld. CIT(A) has also referred to the reconciliation made which he has found to be satisfactory – The issue was restored for fresh adjudication. Disallowance under section 40(a)(ia) – Held that:- If the TDS has been deposited before the date of filing of the return, the disallowance is not sustainable - As per the provisions of section 40(ia) for the relevant period TDS was not deductible if the turnover of the previous year was less than Rs. 40 lacs – The issue was restored for fresh adjudication. Capital from undisclosed sources – Held that:- The amount was outstanding balance of the HDFC bank in the name of the assessee and the said account was transferred to the capital account of the assessee by debiting the same to the HDFC bank - The issue was restored for fresh adjudication. Low household drawings – Held that:- The household expenses have been incurred out of the assessee’s own capital account from which he has also contributed to investment u/s 80C – The expenses incurred by the HUF were granted as relief – Decided against Revenue.
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2013 (11) TMI 1483
Unexplained cash payment – Held that:- No evidence of any payment having been made by the assessee - The assessee could not reconcile the difference in account of sundry creditors appearing in balance sheet and as per sundry creditors the entire amount outstanding was paid in cash - No evidence was produced by the assessee to substantiate the fact that no payment has been made by it to the sundry creditors – Decided against assessee. Bogus purchases – Held that:- The assessee failed to furnish any reasonable and sustainable evidence regarding genuineness of the purchasesdespite several oppurtunities given by the CIT(A) – Also the assessee could not improve its case before the Tribunal for establishing genuineness of the claimed purchases except producing one bill – The CIT(A) was justified in adding this - The AO has not addressed the submission of the assessee regarding allowing adjustment of the loss on account of rejection from debtor - The same cannot be done at the appellate stage as the assessee never claimed this amount in its return of income – The issue was restored for fresh adjudication.
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2013 (11) TMI 1482
Long term capital gain – Sale of plot of land - The Income Tax Department while conducting search at the premises or Piyush Group received a document from "anonymous sources" through fax purporting to be an Agreement to Sale of the said Property - the assessee and the buyers vehemently denied having ever entered into any such Agreement to sale of the said property at this consideration. They however stated that there was an earlier agreement to sell the property at a sum of Rs. eight crores which due to some problems in title in the land got reduced to Rs.5.5 crores and the final sale deed was executed at this sum of Rs.5.5 crores. Held that:- In the case of purchaser on the very same transaction, the Tribunal considered each set of evidences relied upon by the Ld.A.O. and deleted the addition of Rs.12.5 crores made in the hands of the purchaser. Before us is the case of the sellers of this property. - A different view cannot be taken on the same set of facts and evidences. - Decided in favor of assessee.
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2013 (11) TMI 1481
Notional Rental income - Taxable under the head income from house property - Vacant property - Held that:- The assessee was not carrying out any business, but he was in occupation of the property. The AO has also alleged that the property had been kept vacant by the assessee for long time deliberately though it was a valuable property which was usable - As per section 22 since the assessee despite occupying the property for the purpose of business did not carry on any business, the profits of which are chargeable to income tax will not qualify the benefit of exception provided u/s 22 - Income from house property of the said property falling within the provision of section 22 of the Act will be determined as per the provisions of section 23(1)(a) of the Act, the sum for which the property might reasonably be expected to let from year to year - Decided against assessee. Rental rate adopted - Held that:- The prevailing rental rate in the locality was around Rs. 60/- per sq. ft. and the rates during the financial year 2007-08 were approximately Rs. 40/- per sq. ft. The AO has not considered the contention of the assessee that the property could not be let out without prior permission of NOIDA authority that too for the agreed purpose of manufacturing color television receiver set of boxes Videocon and that water and electricity connections were not available in the property - The issue was set aside for fresh consideration of lettable value.
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2013 (11) TMI 1480
Reassessment - Duplicate claim of same payment - valuation of stock - Held that:- The excise duty amount debited in the profit and loss account is included in the value of closing stock - The assessee has disclosed this fact in the significant accounting policies - The assessee has made provision for excise duty under the head "outstanding liabilities" - The assessee is of the view that incidence of excise duty arises as soon as the product is manufacture - AO has not disturbed the value of closing stock value declared by the assessee, i.e., he has accepted the value disclosed by the assessee, which included the amount of Excise duty payable on the closing stock. Hence, the AO may not be correct in holding that the liability to pay excise duty would arise only in the succeeding year upon sale of the closing stock. - Therefore both the views as that of assessee as well as AO ultimately will result in the same figure - Decided in favour of assessee.
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Customs
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2013 (11) TMI 1479
Refund claim u/s 27 - Import of Watchguard Security Products - Duty paid under Customs Tariff Heading 8473.30 - Exemption under Customs Notification No. 17/2001-Cus., dated 1-3-2001 - Classification under Customs Tariff Heading 8473.30 or under 8524 - Held that:- software was etched and was not portable to any other hardware and hence has no separate existence. The Counsel has made arguments showing product literature showing capability of the device to alert about software updates and to suggest recommended configuration. According to him this would imply that the software was separate commodity - value under dispute is the value of software etched on hardware when goods were imported - Website of the manufacturer indicates value as single unit price of hardware and value of the software were not available separately. It is also noted that the basic and the main function of the imported goods related to the hardware components and the embedded software used to operate the hardware, an integral part of the same. The goods imported by the appellant has no independent existence at the moment it is etched on the volatile memory of the hardware, it becomes part and parcel of the said system. Thus, the claim of the learned counsel in this case that the software and hardware were separate and distinct cannot be acceptable - Following decision in the case of ACER India Ltd. [2004 (9) TMI 106 - SUPREME COURT OF INDIA] - Decided against assessee.
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2013 (11) TMI 1478
Confiscation of the Echo Cardiography system imported - Penalty u/s 111 - Held that:- Adjudicating authority did not specify the amount of Customs duty payable by the respondent - Held that:- sub-section (2) of the said section obligated the owner/person referred to in sub-section (1) to pay any duty and charges payable in respect of the goods confiscated with option for payment of fine in lieu of confiscation. The statutory provision is clear enough and hence it was not necessary for the Commissioner to specify the duty liability of the party. As the appeal filed by the respondent against the confiscation of the goods was dismissed by this Tribunal and as there is no evidence of this Tribunal’s decision having been set aside by appellate court, the respondent is liable to pay the duty leviable on the goods in accordance with law - Decided in favour of Revenue.
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2013 (11) TMI 1477
Rectification of mistake - Bench has passed final order on the submission that there was no notification issued appointing Commissioner, Central Excise & Customs, Daman to adjudicate the show cause notices issued to the respondents - Appellant contends that there was indeed a Notification No. 120/2006-Cus. (N.T.), dated 27-11-2006, which appointed the Commissioner, Central Excise & Customs, Daman to exercise his powers to discharge the duties as an adjudicating authority - Held that:- Court was not shown any notification appointing the Commissioner, Central Excise & Customs, Daman as adjudicating authority to hear and dispose of the appeal arising out of the show cause notice dated 31-3-2005. Notification dated 27-11-2006 on which learned departmental representative is relying upon was not brought to our notice and hence that is not a mistake apparent on the face of record in our order. In the absence of such notification being produced before us it cannot be said that bench overlooked the same. Hence, there is no error apparent on the face of the order - Rectification denied.
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2013 (11) TMI 1476
Confiscation u/s 111(d) - Penalty u/s 112 - Contravention of the conditions specified in the Import Policy - Cars notimported from place of manufacture - Held that:- proving the path of the goods imported is not sufficient to meet the condition that the goods should have been imported from the country of manufacture. It is not for the Tribunal to guess the reason behind the condition and order what would be sufficient compliance with the policy. The Import Policy is formulated having regard to various trade considerations of the country and international obligations. It is not for Tribunal to look into the merits and demerits of the import policy because the Tribunal does not have before it all the facts and constraints that result in a policy. We are also not able to agree with the contention that since the policy has been amended in December 2008, the amended position should be applicable for imports made in 2007. This argument if accepted will also lead to considerable difficulties to the Government in the matter of implementation of import policies from time to time which changes depending on various factors - cars were imported in contravention of the condition that the car should have been imported from the country of manufacture and the cars were rightly confiscated under section 111 (d) of the Customs Act - However, there is no contravention of other conditions - Therefore, penalty is reduced - Decided partly in favour of assessee.
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2013 (11) TMI 1475
Refund of SAD in terms of Notification No. 102/2007 - Availment of CENVAT Credit - Import of cars - Held that:- non-endorsement of non-availability of CENVAT credit of the SAD paid on the sales invoice, in the invoice issued by the appellant, there is no mention of SAD separately and therefore, the question of buyers taking any credit would not arise at all. In a similar case, where endorsement relating to SAD was not made on the sales invoices, in respect of sales through non-registered dealers - substantive benefit of exemption Notification should not be denied on the ground of procedural or technical infraction - since the goods are cars, on which CENVAT is not available and the dealers through whom the goods are sold are also not dealers registered for CENVAT credit purposes, the question of the buyers availing any CENVAT credit would not arise at all. Therefore, non-endorsement of non-availability of SAD does not materially affect the refund claims - Following decision of Commissioner of Customs, Bangalore v. Kohler India Corporation Pvt. Ltd. [2011 (8) TMI 1098 - CESTAT BANGALORE] - appellant is directed to produce before the original adjudicating authority all the documents specified in the deficiency memo and, thereafter, the original adjudicating authority shall consider the refund application afresh and decide the eligibility of the appellant to the refund - Decided in favour of assessee.
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2013 (11) TMI 1474
Violation of Notification No. 102/2007, dated 14-9-2007 - Refund of SAD - Whether no declaration of the requirement of para 2(b) of Notification No. 102/2007-Cus., dated 14-9-2007 in the invoices disentitles the appellant-trader to the refund of additional customs duty paid - Conditions mandatory or directory - Held that:- A Notification benefit being given at the cost of people of India the condition cannot be said to be directory without being mandatory. Every benefit through notification is granted with conditions, stipulations and limitations to safeguard interest of Public Revenue. When the appellant failed to make a declaration it cannot be said to be a technical lapse where as breach of compliance to the Notification No. 102/2007 debarrs to the benefit granted by that. The spirit of the declaration can be appreciated from the object it is expected to achieve. The declaration envisaged that expression thereof on the invoice shall make the buyer beware that no credit of additional duty of customs shall be admissible and that shall invite attention of all user of the said document. Therefore, such a precaution cannot be interpreted to be a technicality of the notification. It is a mandatory requirement and breach thereof shall disentitle the appellant to the benefit of refund of additional duty of customs. Irrespective of the status of the appellant whether as a trader or a manufacturer that does not bring the appellant to a different footing when compliance to the requirement of Notification stated above is mandatory and not discretionary or discriminatory. Whether subsequent Notification No. 29/2010-Cus., dated 27-2-2010 should be read as clarificatory and retrospective - This is inconceivable for the reason that benefit granted by a Notification operates from the date that is notified and that does not intend the benefit to flow at public cost retrospectively. Therefore grant of the Notification in question cannot be construed to be retrospective in nature - Decided against assessee.
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Service Tax
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2013 (11) TMI 1509
Restoration of appeal dismissed by the CESTAT for failure to comply with conditional stay order - appellant submits that as the appellant has deposited the entire amount as demanded by the revenue, though after the time period fixed by the Tribunal, the lapse on the part of the appellant may be condoned - negligence - Held that:- The plea that the Chartered Accountant retained by the Municipal Corporation did not pursue the appeal, did not absolve officers of the Municipal Corporation from seeking information relating to the appeal, but as the Municipal Corporation has deposited the amount determined by the CESTAT and the matter in dispute involves public funds, the appeal is allowed, impugned order is set aside and the appeal is restored to the CESTAT - appeal restored - decided in favor of appellant.
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2013 (11) TMI 1507
Suomotu refund of excess payment - waiver of Penalty under section 76 - Erection, Commissioning and Installation Service - Held that:- liability admitted during a proceeding either at the adjudication stage or at the first appeal stage, cannot be agitated in further proceedings. Therefore, I hold that the appellant cannot get any refund of the payment made subsequently for the period Oct 10 to March 11 - there is payment in excess of the actual tax liability because of the wrong understanding of the service tax laws by the appellant and it is not proper to impose penalty in such circumstances where tax is already paid twice. Considering the facts and circumstances of the case, there is force in the submission of the appellant that there was reasonable cause for delay in payment of tax for the period Oct 10 to Mar 11. So I invoke the provisions of section 80 of the Act and waive the penalty imposed on the appellant. Thus the demand of tax along with interest is upheld and penalty imposed is set aside - Decided partly in favour of assessee.
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2013 (11) TMI 1506
CENVAT Credit of service tax paid of GTA service - Retreading of tyres - Goods Transport Agency service - Held that:- any test with reference to ‘place of removal’ cannot be applied in the case of output service because said expression is defined in Central Excise Act and has relevance for the purpose of paying excise duty. In the case of services which are intangible, place of removal cannot be determined easily and the expression ‘place of removal’ defined in Central Excise Act for determining excise duty payable cannot apply. I am also not in agreement with the argument that transportation of tyres to and fro from the place of repair has no nexus with the output service because the service is undertaken as per the contract. Therefore, I am of the view that the case law quoted by the Ld. AR in the matter of excisable goods is not relevant to the facts of this case. In the circumstances, I set aside the orders of the lower authorities and allow the appeal holding that Cenvat credit on the GTA service will be available to the appellant - Decided in favour of assessee.
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2013 (11) TMI 1505
Stay application - works contract - composite contract or not - Department had issued a demand notice by adding the value of supply of materials/equipments to the portion of civil works, while computing the service tax liability - Penalty u/s 78 - Held that:- prima facie, it is clear that a composite contract or turn-key project could be vivisected and the service portion of the contract could be separated from the pure supply portion of the equipments and materials contract. After going through the sample copies of the invoices and contracts relating to pure supply of materials, prima facie, we find that the Applicant have raised separate invoices for supply of equipments/parts on which VAT had been discharged by them. In these circumstances, we are of the view that the Applicant could able to make out a prima facie case for total waiver of predeposit of the dues adjudged. Accordingly, predeposit of all dues adjudged is waived and its recovery stayed during pendency of the Appeal - Stay granted.
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2013 (11) TMI 1504
Condonation of delay - No specific reason mentioned in application - Held that:- Merely averring accident of spouse of an employee, appellant is not absolved of its obligation to adhere to the limitation prescribed by law. When the fact situation does not demonstrate now the appellant was prevented by the cause of spouse of an employee to seek appeal remedy. Appellants have not explained anything on this court. Laxity does not add to longevity to a remedy which exhausts with the callous and abuse of process of law following doctrine of resjudicata. Casual approach of appellant shows its scanty regard to law. Had there been bona fide, the appellant would have pursued its right duly. But that has not come to record. No vigilant attitude of appellant is visible from record - if the appeal is thrown at the threshold, the appellant shall suffer. But the appellant having caused prejudice to other side, law of limitation shall not grant him any immunity today. We are also conscious that no one shall prefer to cause prejudice himself following the decision of the apex court in Collector Vs. Land Acquisition, Anantnag and other vs. Mst. Katiji and Others [1987 (2) TMI 61 - SUPREME Court]. But this is not the case where the appellant has acted bona fide. Therefore the stay application for condonation of delay does not deserve any consideration - Condonation denied.
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2013 (11) TMI 1503
Waiver of pre-deposit - Stay application - Business Auxiliary Service - Commission remitted by the petitioner in foreign currency for facilitating export of cotton, rice, cashew and sesame claimed to be agricultural produce by the petitioner - Corporate bank guarantee - Held that:- Notification No.8/2004-ST amended several earlier exemption Notifications including Notification No.13/2003-ST. Under this Notification, inter alia, Notification No.13/2003-ST was amended to introduce an additional clause in the Explanation to the earlier Notification No.13/2003-ST. The scope of the primary exemption granted was also restricted. Under the earlier Notification No.13/2003-ST, business auxiliary service provided by commission agents was exempted from the liability to tax. By Notification No.8/2004-ST, the exemption was restricted to business auxiliary service provided by commission agents in relation to sale or purchase of agricultural produce. Conclusion by the adjudicating authority that commission paid by the petitioner to its overseas agents for facilitating export of rice, sesame seeds, cashew nuts etc. is not entitled to the benefit of exemption Notification No.8/2004-ST, is unsustainable. - stay granted on this issue. Regarding demand of service tax on corporate guarantee commission - held that:- Singapore corporate entity was neither a Bank nor had provided a bank guarantee. It provided a guarantee on the basis of its own resources assets to Indian banks to facilitate lending of money by Indian banks to the petitioner. This would not, in our considered view, constitute bank guarantee within the meaning of the said expression in Section 65(12) of the Act - provision of corporate guarantee clearly falls outside banking or financial services. however it would be falling under "Business Support Services" (BBS) - entire amount of service tax with interest directed to be deposited - stay denied
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2013 (11) TMI 1502
Denial of refund - Export of goods - Notification No.41/2007, dated 06.10.2007 - Bar of limitation - from the date of export (i.e. shipping bill) or from the date of payment of service tax where service tax has been paid under reverse charge method - Held that:- The service tax law requires payment of tax only on payment of consideration to the agent abroad from who service is received. That being the case, the facts of this case cannot be equated with that in the case of GTN Engineering (I) Ltd. (2010 (8) TMI 314 - CESTAT, CHENNAI) and the legal principle of implying necessary changes into a section of one Act made applicable for purposes of another Act cannot go to such extent to defeat the very objective of a beneficial scheme like grant of refund due on exports. After coming to the conclusion that clause (a) to Explanation B will not apply, I have sequentially gone through the other clauses and I find that the most appropriate clause that will apply in this particular case, is clause (f), that is date of payment of service tax. In this case the applicant filed his claim within one-year from the date of payment of service tax and, therefore, I am of the view that the claim is filed within the time-limit and the appellant is eligible for refund - Decided in favour of assessee.
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2013 (11) TMI 1501
Penalty u/s 76 and 78 - Simultaneous penalty - Held that:- show cause notice was issued in this case after 10.05.2008 when proviso to Section 78 of the Finance Act, 1994 was already existing after its amendment - Recourse can be had to the provisions as prevailing at the time of initiation of proceedings, and the period available would be the one as permissible under the provisions existing at the time of issuance of show cause notice, in spite of the fact that the short-levy or non-levy refers, to the period when different period of limitation was available - provisions existing on the date of show cause notice will be applicable. In the present appeal, the period involved is 01.04.2006 to 31.03.2011 and show cause notice was issued on 05.07.2011. Proviso to Section 78 of Finance Act, 1994 was introduced with effect from 10.05.2008 and was thus existing on the date of issue of show cause notice - show cause notice was issued when proviso to Section 78 of Finance Act, 1994 was existing, therefore no penalty under Section 76 is imposable when Section 78 of Finance Act, 1994 penalty is imposed - Following decision of ATMA Steels Pvt. Ltd. & Ors Vs. CCE Chandigarh & Ors [1984 (6) TMI 60 - CEGAT, NEW DELHI] - Decided in favour of assessee.
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2013 (11) TMI 1500
Waiver of pre-deposit of Service Tax - Commercial Training and Coaching Services - Exemption under Notification No.24/04-ST dated 10.09.2004 - Vocational training institute - aircraft maintenance engineer approved by D.G.C.A - Held that:- Applicant have been issuing certificates after completion of necessary training at their institute to candidates enrolled with them and the said certificate has been approved by the D.G.C.A. and qualify the candidates to sit for an examination conducted by DGCA to make them eligible to take employment as an aircraft maintenance engineer. We find that in denying the said benefit to the Applicant the reasoning of Ld. Adjudicating Authority that since the certificate issued by the Applicant would not directly entitle a candidate to seek employment or undertake self-employment, hence their institute could not be called as vocational institute - prima facie to qualify as vocational training institute, it is not necessary that the certificate issued to the candidate should lead directly to employment or self-employment. In these circumstances the Applicant could able to make out a prima facie case for total waiver of pre-deposit of dues adjudged. Accordingly all dues adjudged are waived and recovery thereof stayed during pendency of the Appeal - Following decision of M/s Indian Institute of Aircraft Engineering Versus Union of India & Ors [2013 (5) TMI 592 - DELHI HIGH COURT] - Stay granted.
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2013 (11) TMI 1499
Levy of service tax on advertising services - Proceedings were initiated against the petitioner for having failed to disclose the consideration received for providing taxable advertising services during the period October 2006 to March 2010 - Remission service tax of the entire amount of 15% commission received from departments, local bodies, organizations in the State of Rajasthan, during the period in issue - Held that:- prima facie there is any infirmity in the order of the Commissioner though the ld. Counsel for the petitioner has pleaded that the entire liability is revenue neutral. If under the provision of the legislation a taxable event had occurred and the provisions enjoin tax liability on the petitioner, it cannot claim immunity on the ground that M/s Rajasthan Samvad had in any event remitted the tax on the gross amounts received by it, part of which was paid to the petitioner as commission, under agreements entered into between the petitioner and M/s Rajasthan Samvad. It requires to be noticed that Commissioner (Appeals) does not impose any penal liability - Assessee directed to make a pre deposit - Stay granted partly.
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2013 (11) TMI 1498
CENVAT Credit - Whether appellant is entitled to the Service Tax credit of Service Tax paid by the appellant on the personal insurance of its employees - Held that:- period of demand in the present appeal is August 2005 to March 2008 before the amendment carried out under Notification No.3/2011-CE(NT), dt.01.03.2011 made effective from 01.04.2011, when life insurance and health insurance services for the employees were specifically excluded from the definition of ‘input service’ under Rule 2(l) of the CENVAT Credit Rules, 2004 - Following decision of Surani Ceramics Ltd. Vs. CCE Rajkot [2011 (8) TMI 311 - CESTAT, AHMEDABAD] - Decided in favour of assessee.
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Central Excise
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2013 (11) TMI 1472
Rebate claim of Cenvat credit availed on issue of bogus invoices – Burden to prove – Waiver of Pre-deposit - Held that:- When the inquiry at the supplier's end shows that there was no supply and only cenvatable invoices had been issued, the burden would be on who had taken cenvat credit on the basis of such invoices, to prove that the goods covered under those invoices had actually been received - No evidence to discharge this burden of proof has been produced by M/s CIPL - Similarly when M/s CIPL have taken cenvat credit in respect of certain goods imported by them and claim to have sent those goods to job workers for processing or manufacture of finished products and inquiry with job workers reveals them either to be bogus entities or having indulged in fictitious transaction of job work, the burden would be on M/s CIPL to prove that the cenvat credit availed material had actually been used by them in manufacture of finished products - No evidence has been produced by M/s CIPL for discharging this burden of proof. There is evidence on record showing that in order to encash the cenvat credit, M/S. CIPL had purchased the cheap goods from the market and exported the same under rebate claim or under draw back claim - they had over declared the value of their export consignment to the tune of 50 to 40 times - M/S. CIPL have committed a huge fraud by availing cenvat credit on the basis of bogus invoices without actually receiving any materials or have availed cenvat credit in respect of certain goods imported by them which were illicitly diverted and were never used for manufacture of the goods for export - substantial amount of fraudulently taken cenvat credit has been encashed in form of rebate claims in respect of the exports made under the rebate claims - A countrywide web of dummy companies has been woven for defrauding the Revenue and this case is only a tip of the iceberg of a much bigger cenvat credit fraud - The main Appellants and their Directors are not eligible for waiver from the requirement of pre-deposit – Pre-deposits were ordered to be submitted - Thus, goods are liable for confiscation and the Penalty also needs to be imposed - Partial stay granted.
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2013 (11) TMI 1471
Denial of Cenvat credit - Details in the dealer's invoice not matching with the manufacturer's invoice – Held that:- The dealer's invoice containing both the commercial invoice number and excise invoice number - the appellant should be given an opportunity to correlate dealer's invoice with the manufacturer's invoice - the orders set aside and the matter is remanded back to the original authority to examine the documents and decide the matter afresh after considering the documents placed by the appellant – Decided in favour of Assessee.
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2013 (11) TMI 1470
Inclusion of cost of advertisement in assessable value – Held that:- It is not clear as to whether the notional advertisement expenses during finalization of provisional assessment presently under dispute was ascertained for the assessee’s own advertisement or the dealer's advertisement - There is no clear quantification of expenses incurred by the various dealers and no material is available in that regard - the demand of duty is not maintainable – Decided against Revenue.
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2013 (11) TMI 1469
Rebate claim on motorcycle exported – Motorcycle liable to pay NCCD – Duty along with interest and penalty demanded - Whether imposition of penalty of Rs.2.02 crores required to be upheld or not – Held that:- The NCCD paid by the assessee is to be refunded to them in cash as their final product was cleared for export and the other duties paid by them already stand refunded to them - there was sufficient credit almost to the extent around Rs.36 crores accumulated with the appellant and same could have been utilized for payment of NCCD and such payment out of cenvat credit account could have been converted into refund in cash - by not paying NCCD, the appellant cannot be held to have been benefited in any manner - On the contrary, the same has resulted in financial loss to the appellant – it would not be justifiable to invoke the penal provisions against the appellant. Relying upon Larsen & Toubro Ltd. Vs. CCE, Pondicherry [2008 (1) TMI 234 - CESTAT, CHENNAI] - Non-payment of differential duty, which would have been refunded to the assessee on account of export of the goods under rebate, results in revenue neutrality and thus, penalty cannot be imposed - the order insofar as it relates to the penalty set aside and the duty is not being contested by the Advocate – decided in favour of Assessee.
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2013 (11) TMI 1468
Cenvat Credit - Nil rated Goods cleared along with the dutiable final product – Exemption under Notification No. 6/2002 – Held that:- Following Rallis India Ltd. vs. Union of India reported as [2008 (12) TMI 46 - HIGH COURT BOMBAY ] - there is no liability to pay 8% amount on removal of the by-product/ waste arisen during the course of manufacture of the main product – also in CCE, Ahmedabad vs. Nirma Ltd. [2012 (10) TMI 138 - GUJARAT HIGH COURT] in case of exempted by-product emerging during the process of manufacture, the provisions of Rule 6 of Cenvat credit Rules are not attracted – Decided against Revenue.
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2013 (11) TMI 1467
Denial of CENVAT credit on inputs Exported – Revenue was of the view that no evidences has been received in the factory for the export – Show cause Notice issued even verification reports were being awaited – Held that:- More than two years have elapsed since the order was passed but still there is no indication of any verification reports having been received by the department from the Commercial Tax Authorities or the Regional Transport Authorities - This is a peculiar scenario which does not appear to augur well for the department - Some amount of evidence was gathered by the investigating officers and some crucial results are being awaited by them - The show-cause notice itself highlighted the crucial character of the evidence being awaited by the department. The department should be given an opportunity to pursue the matter so that the investigations could be completed within a reasonable period of time and appropriate amendment to the show-cause notice by way of addendum or corrigendum could be made and the parties could be given a reasonable opportunity of contesting the show-cause notice so amended and of being personally heard also – order set aside and the case is remanded so as to enable the department to endeavour to obtain relevant verification reports from the authorities concerned - amend the show-cause notice (if need be) on that basis and undertake de novo adjudication of the case after following the principles of natural justice.
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2013 (11) TMI 1466
Determination of the assessable value - TMT bars manufactured and cleared from factory to the premises of consignment agent –Waiver of Pre-deposit - Revenue was of the view that the price at which the goods were sold by the consignment agent has to be adopted for the determination of value – Held that:- The Commissioner though acknowledged the principle of adopting the selling price from the premises of consignment Agent nearest to the time of clearances of goods from the factory of Applicant, as the basis for determination of assessable value of goods transferred from the factory to the premises of consignment Agent, but wrongly adopted a single uniform price for the whole month in determining the value of said stock transferred goods - Prima facie, there was no merit in the reasoning advanced by the Commissioner in adopting the selling price of the buyer of the consignment agent - The applicant have offered to make pre-deposit of Rs.10,00,000 – Thus, assessee is directed to deposit Rupees Ten Lakhs as pre-deposit – upon such submission rest of the duty to be stayed till the disposal – Partial stay granted.
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2013 (11) TMI 1465
Valuation of Goods under Rule 7 Or Rule 5 - sale price of depot or inclusion of freight - No evidence educed by the assessee - Waiver of Pre-deposit – Held that:- There was no reference to the evidence for the assessee to have correctly valued the goods under Rule 7 - The stay application merely claims that the appellant has made out a very strong prima facie case - It also states that, if any pre-deposit is directed, the appellant will be put to undue hardships - Neither of the pleas has been substantiated - the appellant is directed to pre-deposit amount as stated within the time stipulated – Stay not granted.
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2013 (11) TMI 1464
Denial of Cenvat credit - Revenue was of the view that instead of aluminium wire and rods, they had received ingots, without payment of duty – Held that:- Wherever complete description was given by the dealer as aluminium wire and rods, the Revenue has extended the benefit of the Modvat credit even if the entries in respect of the same were also made in RG-23A Pt. I register meant for aluminium ingots - the appellant was following the practice of entering aluminium wire and rods in the register meant for aluminium ingots, irrespective of the fact where complete description stand given by the dealer or not - all the invoices raised by the dealer gave the correct tariff heading relatable to aluminium wire and rods and gave correct cross reference to the invoices. Merely because the assessee has entered receipt of wire and rods in the register of ingots, as per the practice being followed by them, denial of Cenvat credit on this technical and procedural lapse is not called for - rate of duty in respect of wire and rods as also in respect of the aluminium ingots was the same and as such there could be no ulterior motive for the appellant to replace wires and rods with ingots – Decided in favour of Assessee.
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2013 (11) TMI 1463
Inclusion of Transportation charges to the assessable value – Held that:- Following CCE, Madurai vs. TCP Ltd. [2010 (9) TMI 488 - CESTAT, CHENNAI] - During the period October, November 2000, depot was not included in the place of removal definition and as such there is no question of inclusion of freight charges up to the depot, in the assessable value of their final product. Extended period of limitation – Held that:- The declaration filed by the assessee discloses that the transportation charges are not being included in the assessable value - the entire information stands given by the appellant to their jurisdictional Range office, at the time of filing the declaration in terms of Rule 173C – there was no malafide, with intent to evade payment of duty - Thus, the extended period was not available to the Revenue – Decided in favour of Assessee.
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CST, VAT & Sales Tax
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2013 (11) TMI 1508
Exemption of tax under Section 4-A of the U.P. Trade Tax Act, 1948 - Rejection of review filed under Rule 25(3)(C) - whether the unit is self-financed or it is financed by any financial institution. - Date of application of loan - whether the assessee had applied for a term loan to the Oriental Bank of Commerce on 5.1.2000 as alleged or on 1.5.2000 as held by the authorities - Held that:- A bare perusal of the two applications alleged to have been submitted by the assessee for grant of term loan which have been filed by the revenue along with the counter affidavit reveals that the application dated 5.1.2000 is for a term loan of Rs.1,52,000/- and a cash credit limit of Rs.2,00,000/- total Rs.3,52,000/-. It has been submitted by one Smt. Kamal Narang as proprietor of the assessee - The other application for term loan dated 1.5.2000 is only for a term loan of Rs.1,52,000/-. It has been submitted on behalf of Smt. Kamal Narang - A bare perusal of the two applications clearly reveals that they are two different applications and the application dated 5.1.2000 is by the assessee whereas the application dated 1.5.2000 is in the individual capacity of the proprietor of the assessee firm. The financial assistance sought by both the applications are different. No evidence was adduced to establish that no application was filed by the assessee for the grant of term loan on 5.1.2000 - tribunal as well as a Divisional Level Committee have manifestly erred in rejecting the exemption application of the petitioner - assessee is held entitle to grant of exemption under Section 4-A of the Act subject to fulfillment of other conditions - Decided in favour of assessee.
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Indian Laws
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2013 (11) TMI 1497
Re transfer of employees - petitioners were appointed as Junior Engineers in the Irrigation Department - Due to non-availability of the posts, the petitioners became surplus and they were transferred to the Trade Tax Department - Petitioners again transferred to Irrigation department - Held that:- order of re-transfer states that they will get seniority, regularisation and promotions on further posts in the parent Department. Their salary will also be protected - Therefore, no reason to interfere - Decided against petitioner.
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2013 (11) TMI 1473
Maintainability of Petition u/s 138 of Negotiable Instruments Act at Mumbai - Power of Magistrate to recall process of summons u/s 201 of Criminal Procedure Code – Summons issued under Section 204 by the Magistrate – Jurisdiction of Magistrate to issue summons - Held that:- The Magistrate is required to issue summons for attendance of the accused only on examination of the complaint and on satisfaction that there is sufficient ground for taking cognizance of the offence and that it is competent to take such cognizance of offence - Once the decision is taken and summon is issued, remedy lies before the High Court under Section 482 Cr. P.C or under Article 227 of the Constitution of India and not before the Magistrate - Relying upon Adalat Prasad vs. Rooplal Jindal and others [2004 (8) TMI 647 - SUPREME COURT] - Section 201 can be applied immediately on receipt of a complaint, if the Magistrate is not competent to take cognizance of the offence - Once the Magistrate taking cognizance of an offence forms his opinion that there is sufficient ground for proceeding and issues summons under Section 204 - there is no question of going back following the procedure under Section 201 - In absence of any power of review or recall the order of issuance of summons, the Magistrate cannot recall the summon in exercise of power under Section 201. Relying upon M/s. Escorts Limited vs. Rama Mukherjee [2013 (11) TMI 95 - SUPREME COURT ] - offence under Section 138 of the Act can be completed only with the concatenation of all the components and for that it is not necessary that all the above five acts should have perpetrated at the same locality; it is possible that each of those five acts were done at five different localities, but a concatenation of all the above five is a sine qua non for the completion of the offence under Section 138 of the Act. Maintainability of Petition u/s 138 of Negotiable Instruments Act at Mumbai - Goods supplied from Mumbai to Delhi – Held that:- The High Court erred in concluding that the courts at Delhi, did not have the jurisdiction to try the petition filed by the appellant under Section 138 of the Negotiable Instruments Act - The business dealing was held at Mumbai; the products were supplied from Mumbai to New Delhi, cheques were handed over at Mumbai and the cheques were dishounoured by the bankers of respondents at New Delhi, and legal notice was issued from Mumbai - Thus, at least one act out of the five ingredients of Section 138 of the Act having committed at Mumbai, the complaint preferred by the complainant before the Magistrate at Mumbai was maintainable – Decided in favour of Appellant.
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